Now that people are becoming more aware of the usefulness of lending, the number of lenders and borrowers has greatly increased. Well-off people are now visiting communities, sharing their loan programs to anyone in need. In effect, people are also building their own private lending clubs with different perks and styles. If you have a large capital stashed and you want to make it grow, you can try building your own private lending club.
These strategies can help you get started:
Reach Out to Communities
If you’ve just started, you must reach out to communities. Try talking to people within your area. Understand their needs and problems, then use the data to shape your loan programs. Once people realized that a new lending club has joined the community, they will be filled with hope. Eventually, they will consider joining your private lending club. Just be patient – the process won’t occur overnight.
Build Social Media Presence
Physical presence is good, but you must also consider social media presence. Every day, thousands of users are communicating through social media. Just imagine the number of Facebook statuses and Twitter tweets being relayed every day! Social media presence will magnify your reach and possibly lead to more applications and inquiries. This is not a one-shot approach; keep your social media presence strong for years and your lending club will grow.
Create a Membership Process
A membership process is the way you’ll screen and accept members. While you’re free to accept all applicants in your lending club, it’s always beneficial to put a screening process. Remember, these members will become borrowers and investors in your club. They will represent your club in many ways possible. Your screening process should be quick and simple, but reliable. Online application forms will do, as long as they’re working properly in your website. You can also set up a Facebook page so applications can be directed there.
Secure Startup Funding
Just like other groups and organizations, you need a startup fund. This fund can come from your pocket or from other investors. Getting a fund can be difficult because you need to convince investors regarding your cause. What makes you stand out from other lending groups? Why would borrowers choose your loan programs and methodology? What is your business strategic plan for the next 5 years? These are just some of the questions that potential investors may ask. The fund can also come from your friends and relatives. While this is a bit easier, you need to understand that trust is on the line. Once you got your funding, you must allocate it well for the survival of your lending club.
Once successful, your private lending club can be a blessing for many people. Always remember to keep your rates fair and manageable. If ever you need to change your rates, make sure that your members are aware of such updates. This way, the members and borrowers will know how to adjust accordingly.